Networking Shines in HP's Gloomy Final Earnings
In its final earnings report as a unified company, Hewlett-Packard on Tuesday reported net revenue of $103.4 billion in fiscal 2015, down 7% year-over-year. But networking was a bright spot, with net revenue of $2.8 billion, up 8% year-over-year.
Non-GAAP diluted earnings per share were $3.59, down 4% year-over-year.
HP split into two companies effective November 1, and the earnings call reflected that split, with executives from both companies speaking out. (See HP Reports 2015 Revenue $103.4B Down 7% Year-Over-Year.)
Beginning with the next earnings call in three months, the two companies will report separately. Hewlett Packard Enterprise includes the IT, cloud and networking business, while HP Inc. (NYSE: HPQ) takes over the parent's personal computer and printer business.
Demand from service providers -- particularly hypercloud providers -- helped drive growth in sales of industry standard servers, which were $13.4 billion, up 7% year-over-year. HP expects cloud builders of all sizes to drive future growth. (See Dell-EMC-VMware Merger Could Push Comms to Kids' Table.)
Meg Whitman, CEO of Hewlett Packard Enterprise, said her company has reached a strategic agreement with Microsoft Corp. (Nasdaq: MSFT), to make Microsoft Azure HP's preferred public cloud provider, while HPE will be the preferred provider of Microsoft infrastructure and services for hybrid clouds. The companies will provide further details next week.
In October, HP announced it will "double-down on our private and managed cloud capabilities and sunset our public cloud offering," Whitman noted Tuesday.
HPE sees hybrid cloud as a significant growth opportunity, she said.
Whitman took a moment on the call to take a shot at competitors EMC and Dell and their planned merger. Those companies are looking to get bigger and "doubling down on legacy technology," while HP is getting leaner and "leaning in to new technology," she said. (See Dell Buys EMC for $67B in Biggest Tech Deal Ever.)
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